SPY getting pounded threatening further downside
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SPY getting pounded threatening further downside
As mentioned the day after the elections, I was looking for market downside and here we are with the markets selling off.
Today the SPY is in danger of confirming a downtrend. If that were to occur the bottom could really drop out and plunge in a vertical drop. I can't trade that setup and would have to watch for a retrace bounce to short sell the market on an overnight trade. Next week we have Thanksgiving and then black Friday. This means that volume will start to lighten up first of all, as lots of traders will be away, and that favors upside. In addition, the powers that be like to encourage shopping and will do their best to prop the market up going into the holiday.
If there is a 5% vertical drop from today's price, that will make consumers pessimistic and impact shopping activity. Let's see what happens though. I have a few day trades in the books for a small loss today, but I'm really not that active as I'm watching for a retrace short setup.
The SPY is trading into the 200 day moving average and it should give some bit of lift at some point, but like I said if it doesn't hold the drop should be pretty steep which is why I say the SPY would be lucky if it held 130 this month.
[IMG]http://i.imgur.com/vZBPE.png[/IMG]
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